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Warren Buffett is considered as the name of
success in investment industry. He is an emblem of experience in
the field of investment. His investment in any business is
considered as a precursor of long-term success. He is the CEO and
chairman of a holding company named as Berkshire Hathaway.
Berkshire Hathaway is considered as one of the most reliable firm
in the field of investment. Since its beginning, it has handled
countless projects successfully.

In the previous month, Berkshire Hathaway made another financial
expedition. It invested five billion US dollars in the Bank of America. As a result of such a
mammoth investment, the stock market showed some unusual trends
and suddenly started rising. This trend was named as
Buffett bounce.

While investing money, Buffett takes a considerable amount of
risk e.g. he prefers to buy to preferred shares over ordinary
shares. His risky approach is considered as a trademark of his
own and should never be followed blindly. For all
times, Buffett’s approach may not necessarily work for you and
can lead you to financial catastrophe.

In 2008, Buffett invested three billion US dollars for the rescue
of General Electric, with the condition that General Electric
will pay a handsome amount of monthly dividend, besides the
original money. In the end, Mr. Buffett earned three hundred
billion dollars from this investment, in addition to dividend.

The preferred shares purchased by Berkshire yielded a ten percent
annual gain. In the mean while, the business of common shares was
not much prosperous. Berkshire purchased the preferred shares of
General Electric shares at $24.5. On the contrary, these days the
value of these shares has decreased to $15.4. It means that there
is an approximate decrease of forty percent in the trade value of
preferred shares of General Electric.

Similar to General Electric, Goldman Sachs grabbed the hand of Warren
Buffett to get rid of its financial calamity. Mr. Buffett
gathered a total of $1.7 billion, with an annual dividend of 10%.
When Mr. Buffett made the investment, the price of a share was
$125 and now it has decreased to $104. In both these scenarios,
Berkshire Hathaway has the rights to easily purchase the common
shares of each company but it can’t use these rights until 2013.

The incumbent deal of Mr. Buffett seems to be very much similar
to General Electric and Goldman Sachs. Mr. Buffett has agreed to
an annual dividend of 6%. It is most likely expected that
Berkshire will make huge amount of money from the stock market.
This is for the reason that it has the warrants to purchase 700
million shares of this bank at $7.14, while the present day price
per share is $7.0.